Government Will Pay More for Shoes and National Clothes

The Government may pay up to 20% more in bids for the purchase of products from the sectors of clothing, footwear and, provided that they are manufactured. The measure increases the competitiveness of those Brazilian products, suffering stiff competition from imported. Also represents an incentive for the Government to increase investment in the Country.
The mechanism, called the margin of preference, was released in August of 2011, along with Brazil’s largest Plan, which includes measures of industrial and foreign trade policy. The incentive provided for in law can reach 25%. However, the Government had set a margin of 8% for clothing, footwear and artifacts, the only beneficiaries in 2011, and which ran until May this year.

Now,according to iamhigher,  the Government included a wider range of products that can be acquired in public bidding and broadened the difference to 20%.The criteria for definition of the margin of preference for national products take into account the ability of generating employment and income of each sector, the development and technological innovation carried out in the country and the price difference between Brazilian and imported products.

The Brazilian Textile Industry Association (Abit) celebrated the decision. “With the new preference margin, we can compete more evenly with Asian products, they were practicing currency dumping for some time, since, in the case of China, the difference between real and yuan comes close to 40% in favour of our competitor,”explained President Aguinaldo Diniz, Son, by way of note. According to him, Chinese exporters rely on 27 types of incentives to cheapen the price of their products.

The Ministry of development, industry and foreign trade reported that the measure goes for Government purchases of products such as mosquito net for cot, tennis shoe black, cotton cap, beret, military sleeping bag and garments and their accessories.

The ministries of Defense and health have utilized this criterion in bids. In April this year, the Government expanded the measure and included medicines, backhoes and graders between products that can be purchased in the Government procurement using the margin of preference.

The Secretary of development of the Ministry of development, Héloïse Menezes, told the newspaper O Estado de s. Paulo this week that one of the stimuli to increase investment in Brazil, given by President Dilma Rousseff, is the increase of purchases governmental national products, provided for in the budget or through the preference margin, in sectors with high power to boost economy. The information is from the newspaper O Estado de s. Paulo.

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